QS Research · Michael Burry's Scion Capital analyst template · 2006
GE Vernova Inc. (GEV)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +1% · downside -35% · upside +44%
Section 13 valued GEV on TTM GAAP EBITDA of $3.54B and TTM EBIT of $2.83B, but FY2026 guidance implies about $6.58B of adjusted EBITDA ($47.0B revenue midpoint x 14.0% margin midpoint), so TTM GAAP EBITDA understates run-rate earnings power by roughly 46% and I use the guidance-implied $6.58B as the single earnings base for all three cases. At 29.2x - GE's EV/EBITDA, the closest SIC 3600 peer - that base plus $13.93B of net cash is $206.1B of equity, or about $779/share, i.e. today's $772.79 is already paying a full peer multiple for the guided earnings, and the 19.7x P/E is an artifact of TTM net income of $10.37B being 3.7x TTM EBIT of $2.83B. What the market is not missing is the AI/grid cycle - it is missing nothing on the order book, which is why the base case is flat; what it may be mispricing is the durability of the 15.4% Q3 2026 adjusted EBITDA margin and the $197B backlog's conversion, worth up to +44% on $8.8B of 2027 EBITDA at 32x. Against that sits a -35% downside if the multiple normalizes to ETN's 21.6x and margin slips to 12.5%, so with base +1%, downside -35% and upside +44% neither the long rule (base >= +30%, downside no worse than -25%) nor the short rule (base <= -30%, upside <= +25%) is met: a mispricing may be forming after a 35.4% drawdown, but there is no margin of safety at 53.8x TTM EV/EBITDA and 17.97x book, so this is a watch, not an own.
Key numbers
- Share price: $772.79
- Market cap: $204.54B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $44.04B
- EV / EBITDA (TTM): 53.8x
- P/E (TTM): 19.7x
- Price / book: 17.97x
The 15 boxes
- ✓ 1. Long-form business notes
GE Vernova sells equipment and long-lived service contracts into the electric power industry through three segments — Power (gas, nuclear, hydro, steam), Wind (onshore, offshore, LM blades) and Electrification (grid, power conversion & storage, software) — and its installed base generates roughly 25% of the world's electricity. On the XBRL numbers, revenue rose every year in the window ($29.65B FY2022 to $38.07B FY2025) and operating income swung from -$2.88B to +$1.39B, so this is a secular-mode name valued on current earnings, not an average. FY2025 net income of $4.88B is larger than pre-tax income of $2.83B, so it contains a tax benefit that is not operating profit; the operating figure to use is $1.39B. Backlog is the forward driver: RPO $94.4B at 12/31/2025 versus $73.4B at 12/31/2024, with services attached to ~1,800 gas turbines and ~24,000 onshore wind turbines.
- ○ 2. Competitive advantage
The sources support scale and a real operating turnaround, not a proven durable moat. GEV's FY2022-FY2025 operating income went from -$2.88B to $1.39B and operating cash flow from -$114.0M to $4.99B, while gross profit rose from $3.46B to $7.54B. But the 10-K describes highly competitive global markets, Chinese and government-sponsored competitors, fixed-price contract risk, and supply-chain concentration. Long-term service agreements and certification standards are the best candidate advantages, yet the same filing stresses execution and quality risk.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) showed revenue of $12.6 billion, up 27% reported and 18% organic, with operating income of $1,394 million, Adjusted EBITDA of $1,943 million (15.4% margin) and diluted EPS of $4.81; gross margin widened to 24.6% from 19.0%. Backlog (RPO) was $196.7 billion versus $135.3 billion a year earlier, but Wind RPO fell 8% from year-end 2025. Nine-month net income of $6,687 million is not a clean operating number: it includes a $4.0 billion pre-tax Prolec GE remeasurement gain and a $0.4 billion pre-tax Proficy sale gain, against nine-month operating income of $2,227 million. Cash generation was exceptional — $15.3 billion of nine-month free cash flow versus $1.9 billion — but largely from customer down payments and slot reservations, while inventories were a $2.1 billion drag and capex nearly doubled.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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